VANCOUVER (NEWS 1130) – The latest jobs numbers from Statistics Canada are staggering and historic, but context is important when discussing them, says an expert.
Statistics Canada says more than one million jobs were lost in March, when efforts to slow the spread of COVID-19 ramped, up forcing many businesses to close and/or layoff employees — many on a temporary basis. The unemployment rate now sits at 7.8 per cent, up 2.2 percentage points from February — the biggest monthly change on record.
“The timing of this and everything is just totally different than before. This is to some extent voluntary,” says Peter Dungan, Associate Professor Emeritus of Economic Analysis and Policy at the Rotman School of Management at the University of Toronto.
“This is the country doing this in the face of an emergency and it has to be interpreted that way as opposed to simply comparing to historical numbers and saying how bad this is.”
Dungan says the numbers aren’t surprising given what has happened in recent weeks, and while it’s good to have a better picture of how many Canadians have been affected by the COVID-19 pandemic, he notes the jobs numbers can’t truly be compared to numbers from other months.
“There’s an economist in the United States, his name is Paul Krugman, who likes to point out that in some ways what we’re doing here is putting the economy in an induced coma. Other words, to make it better you actually in a sense put it to sleep,” adds Dungan.
“This is why these numbers are entirely different than what we’ve had in past recessions going back to the 70s, 60s and even before, or even the Great Recession. This is people being forced not to work as opposed to people losing their jobs because people don’t want to buy things from the economy, and in that sense, it has to be interpreted completely differently.”
Dungan says Canada’s unemployment rate has gone even higher than this March’s 7.8 per cent rate, although the numbers are expected to get worse in April.
“The unemployment number comes from a survey that’s done in about the middle of the month, it’s called reference week. So the numbers that we’re seeing for March are not even the end of March, they’re more like the middle of March before the worst of this got going,” says Dungan.
He credits the federal government for introducing measures to help people keep their jobs or get Employment Insurance if they are out of work, allowing them to keep spending, which will prevent job losses caused by them.
“The interventions that have been made will stop that kind of successive rolling loss of jobs that we’ve seen in past recessions,” he adds. “t’s going to get bad for a while. i’m optimistic by nature and I think we could have a fairly fast snap back if we can get on top of the COVID crisis.”